Millions won't switch to private banks due to fear or ignorance - Spear's Magazine

Millions won’t switch to private banks due to fear or ignorance

Nearly four million people in the UK are likely to change bank in the next twelve months – but only 12 per cent of them would choose a private bank over a high street bank.

That’s according to a new survey that found that private banks were considered to be too expensive and not as financially secure as high street banks – most of which have private banking or wealth management divisions offering similar services.

Almost a third of these potential switchers (32 per cent) did not even know what a private bank was.

The others were concerned about their cost, with 25 per cent saying monthly fees were too high and 27 per cent saying they did not have enough money to deposit to become a customer.

Read more on private banking confidence crisis from Spear’s

According to the study, 26 per cent of those considering switching bank in the UK believed that private banks would not be able to meet their needs as well as high street banks because they didn’t have a large network of branches, while 17 per cent said private banks were less secure than high street banks because of their smaller size.

Matthew Parden, managing director at Duncan Lawrie Private Bank, which commissioned the research, said private banks aren’t as expensive as people think. He said a premium account in a high street bank cost on average £15 per month, compared to a minimum of £25 in some private banks, including Duncan Lawrie.

Read more on Duncan Lawrie from Spear’s

In comparison, Coutts charges £150 quarterly, equivalent to £50 a month, while Weatherbys Private Banking charges £40 a month but only accepts customers with net assets of more than £3 million or annual income of at least £300,000. All three banks don’t charge their respective fees if the client invests at least £250,000 with them.

‘If you consider all the extra benefits that a private bank can provide, spending an extra £10 a month is still great value for money,’ said Parden in a statement. He added that private banks don’t need to have branches everywhere as bankers have a closer relationship with their customers.

‘A good private bank manager will give you their direct line and mobile phone numbers, their email address and will even come and visit you.’